Stock futures modestly lower even after report shows fewer jobs cut in Jan. than expected

Stock futures modestly lower ahead of opening

NEW YORK — Stock futures fell modestly Wednesday even after a payroll company’s report on job cuts in January came in lower than economists had expected. Mixed earnings were a drag on trading.

A report on the service sector is due out after the market opens and economists expect it will show further signs of an economic recovery.

Stocks have rallied the past two days on upbeat reports that show the overall economy is continuing to rebound. The market retreated late last month on concerns the economic recovery wasn’t sustainable and that a strong 10-month stocks rally was running out of steam.

Overseas markets mostly rose following the second straight day of big gains in the U.S.

Ahead of the opening bell, Dow Jones industrial average futures fell 20, or 0.2 percent, to 10,204. Standard & Poor’s 500 index futures fell 4.00, or 0.4 percent, to 1,093.20, while Nasdaq 100 index futures fell 3.50, or 0.2 percent, to 1,765.50.

The ADP jobs report showed employers slashed 22,000 non-farm, private jobs last month. That was smaller than the 30,000 cuts forecast by economists, according to Thomson Reuters. It was the best showing since employment started to decline in February 2008, providing further evidence that unemployment is stabilizing.

High unemployment remains one of the biggest obstacles to a strong, sustained recovery.

The ADP report often signals the strength of the government’s upcoming employment report. The Labor Department puts out its monthly report on Friday.

The government’s report is expected to show employers added 5,000 jobs last month, but that the unemployment rate rose to 10.1 percent from 10 percent in December.

A report from the Institute of Supply Management is expected to show the U.S. service sector grew last month. The trade group’s service sector index likely rose to 51 last month from a revised 49.8 in December. A reading above 50 indicates growth.

The report is due out at 10 a.m. EST.

The service-sector gauge is watched closely because jobs in the sector account for more than 80 percent of employment. The sector is also highly dependent on consumer spending, which accounts for about 70 percent of economic activity.

Any signs of growth would provide a welcome reassurance the economy and jobs market are improving.

The ISM’s better-than-expected report released Monday on the manufacturing sector helped the market rally after retreating much of the final two weeks of January.

Drugmaker Pfizer Inc. and media companies Comcast Corp. and Time Warner Inc. all reported a jump in fourth-quarter profit. Both Comcast and Time Warner topped analysts’ expectations and their shares rose in pre-opening trading. Pfizer shares dipped after its profit came up just short of forecasts.

The Dow jumped more than 100 points for the second straight day on Tuesday, following an upbeat report on pending home sales and strong earnings from homebuilder D.R. Horton. The battered housing market helped push the economy into recession, but has shown signs of modest improvement in recent months.

The National Association of Realtors, a trade group, said its index of people with contracts to buy homes rose 1 percent in December, marking the ninth increase in the past 10 months. The report provides an indication of how home sales are likely to fare in March and April.

D.R. Horton’s fiscal first-quarter profit was its first since 2007 before the housing market collapsed.

Meanwhile, bond prices fell Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.68 percent from 3.65 percent late Tuesday.

The dollar rose against other major currencies, while gold prices fell.

Overseas, Japan’s Nikkei stock average rose 0.3 percent. Britain’s FTSE 100 rose 0.2 percent, Germany’s DAX index gained 0.1 percent, and France’s CAC-40 fell 0.1 percent.